Prices continue to fall for electronic components
Staff -- Purchasing, 3/20/2003 2:00:00 AM
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Buyers responding to PURCHASING magazine's monthly Business Survey indicate that prices for electronic components continue to fall, in general, but the rate of decline isn't as steep as last year and fewer components are experiencing declines. Where prices do continue to slide in 2003, the percent changes are likely to be in the low single digits instead of double digits as in 2002.
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Electronics purchasers can expect memory pricing to be volatile this year. It's no secret that 256-megabit (Mb) DDR tags have fallen dramatically over the last six months. Much of the decline has occurred in the last two months. While DDR tags will likely fall some more, they are expected to stabilize later in the year as demand picks up. Meanwhile, 128 Mb DRAM price erosion has slowed as DRAM manufacturers have eased back on production in favor of 256 Mb DDR DRAM.
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Buyers at computer companies should keep a close eye on microprocessor prices. With business less than robust, Intel will likely be aggressive in reducing processor tags, especially for speedier versions of Pentium 4 and Celeron processors, to keep pressure on rival AMD. In late February Intel cut tags for Pentium 4 processors by 6-21% depending on speed. It also reduced prices for its Xeon line by 12-16%. Buyers can expect further price cuts for Pentium 4 processors and for the Celeron 2.2 GHz, 2.1 GHz and 2.0 GHz devices.
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Capacitors, resistors, switches and connectors will be under downward price pressure for the year. Capacity is more than plentiful. If demand for electronic end equipment does not pick up later in the year, price erosion could be in the 7-8% range.
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